Nick Minchin (SA, Liberal Party, Minister for Finance and Administration) Share this | Hansard source

I thank Senator Fifield for his question. I think he knows better than most that this country does face a very significant demographic challenge over the next decade, as our first intergenerational report, in 2002, demonstrated. Unless we put money away now to deal with that challenge, the Australian government will have much more difficulty looking after older Australians properly in 10 years time and onwards. The nation, on the basis of this first intergenerational report, will be in deficit. Either services will have to decline or taxes will have to rise. We will release the second intergenerational report as part of the upcoming budget. I predict that that will show that we continue to need to put money aside now for this demographic challenge.

This government has implemented a plan to deal with that problem. That plan is the Future Fund. In its most recent statement on Australia, the International Monetary Fund said that the establishment of the Future Fund means that Australia is well placed to face the challenge of an ageing population. By locking money away and having an independent board invest it wisely, we can build savings to sustain the budget when the demographic pressure really does hit.

That is why Labor’s policy to raid the Future Fund is so irresponsible. I probably should describe it as ‘policies’, because Labor is planning to raid the fund in two different ways. Up until now, their policy has been to strip all the earnings out of the fund—and that was bad enough—but now we learn that their policy is actually to strip capital out of the fund. How on earth can a savings fund grow to meet the nation’s future needs if it is not allowed to keep its earnings for reinvestment and, even worse, if its capital is being ripped out of it? We call on Mr Rudd to release his costings now to show how on earth you can raid the fund in the way Labor proposes and still grow the fund to meet the challenge.